NYC's outsider-restriction policy in affordable housing lotteries sharply curbed in landmark resolution of long-litigated fair housing case

Remarks (as delivered) of ADC’s executive director at press conference of January 22nd

Good afternoon, everybody. I’m Craig Gurian, the executive director of the Anti-Discrimination Center and lead counsel in the fair housing litigation of Noel and Senat v. City of New York, the case that challenged New York’s outsider-restriction policy in affordable-housing lotteries. I’m happy to report on an excellent negotiated outcome, a Stipulation and Order that was signed today by the presiding judge, Chief Judge Laura Taylor Swain of the Southern District.

I want first to take a moment to offer my thanks to several people. First, my co-counsel at Cuti Hecker Wang. Second, the Lawyers’ Committee for Civil Rights Under Law, who submitted an amicus in support of the plaintiffs in this case. Third, our clients — who stayed the course through what was a very long and contentious litigation. Fourth, I want to thank my friend and former colleague Roger Maldonado. There’s simply no way that this case could have been litigated without Roger’s tireless efforts, his many insights, and his commitment to the anti-segregation principles that animated this case. Last, I’m deeply indebted as always to Lori Bikson, my partner in all things for more than 30 years. Lori: I thank you and salute you. I should also acknowledge the professionalism of the line staff assigned to this matter in the Law Department, led by Melanie Sadok.

The issue of the discriminatory nature of the city’s community preference in affordable housing lotteries should have been resolved early in the Bloomberg administration, when it was made aware of the policy’s obvious role in perpetuating segregation. It should have been resolved later in that administration when the Fair Housing Justice Center joined the Anti-Discrimination Center in calling out the discriminatory nature of the policy. And then, early in the de Blasio administration, it should have been HUD who took responsibility for enforcing the Fair Housing Act. It didn’t.

Ultimately, it took private plaintiffs acting essentially in the role of private attorneys general to prosecute this matter.

The evidence of disparate impact and perpetuation of segregation — along with the city’s intentionally allowing itself to be influenced by those who wanted to maintain the segregated status quo — had to be developed over years of litigation. And the evidence was compelling. And that evidence accords with the intuitive sense that everybody has had all along. Since the city as a whole is more racially and ethnically diverse than most individual community districts, a preference for community-district residents naturally favors a less diverse applicant pool. The Stipulation and Order that was entered today — and, to be clear, this is a permanent, binding court order — substantially cuts back on the outsider-restriction policy. (We have called it outsider-restriction because restricting entry by New Yorkers living outside the community district was exactly the point of the policy.)

Under current practice, there is outsider restriction in respect to 50 percent of the units being offered in a lottery. Under the order, there’s a transition period that begins in three months and lasts through April 2029. Lotteries first advertised on Housing Connect during that period will have outsider restriction capped at a maximum of 20 percent of units. Beginning in May 2029, the outsider-restriction cap will be lowered still further to 15 percent, a drop of 70 percent from current practice.

I mentioned the term “cap” because it’s important. Nothing precludes the city from going lower. Mayor Adams, unlike his predecessors, said during his campaign that he wanted to get rid of the preference altogether in some areas of the city. He may not have been aware at the time that it’s not just Black-White segregation that the policy perpetuates, but segregation as between most other racial and ethnic pairings as well: most notably between Black and Hispanic New Yorkers. Notwithstanding his statement today, I hope Mayor Adams and his team give thoughtful consideration to phasing out the preference altogether.

Very importantly, what is being capped is not just the community preference, but any local geographic preference that deviates from citywide equal-access. It doesn’t matter why local geographic preference is being given at any level of geography or whether it relates to current or former residents. The cap applies.

For the first time, we are moving away from the idea of racial turf and, as required by paragraph 12 of the Order, telling applicants and potential applicants that every neighborhood should belong to all of us regardless of where we come from and regardless of where we want to move. When have you ever heard a politician in this city say that? 

Both parties recite as one of the anti-segregation principles the fact that New York suburbs have, over decades, failed to meet their share of affordable housing need. That failure very seriously cemented residential segregation in place in the New York metropolitan area. Governor Hochul recognized the need for all counties, towns, and villages to play their role with her proposed Housing Compact last year. The question now is whether legislative leaders — at least come 2025 — will abandon their cowardly indifference to the twin crises of segregation and affordability and recognize that the pretty-please approach to getting affordable housing built in the suburbs has not worked for 50 years. In addition to legislative tools, there are also litigation tools based on current law that both the city and state can deploy if there is will to do so. 

There’s obviously still a lot of work to do. Perhaps the lowest of low-hanging fruit is to finally get a co-op disclosure bill passed, ending the environment of secrecy that facilitates discrimination in co-op admissions.

A critical way of remedying New York City’s history of segregation — and doing this would be entirely consistent with Mayor Adams’ “City of Yes” and Speaker Adams’ fair-housing framework — would be to concentrate affordable-housing developments in communities that: (1) have Black, non-Hispanic population as of the 2020 Census of less than 5 percent; (2) are in or overlap with City Council districts where there were fewer than 500 units of new housing developed in the period 2014 to 2022; and (3) have dramatically less public housing than the average citywide.

Another one: The city has yet to deploy its potential at all to act as a developer of housing that mixes market-rate condominium units with affordable rental units. 

Some of the biggest hurdles to achieving the task of desegregating New York City come in the form of not-for-profits and “advocates” who have been committed for a variety of reasons to maintaining the residential racial status quo. I even had the head of a DC-based civil rights organization tell me that we “needed to understand those lawyers who worked to preserve the racial integrity of neighborhoods.” That kind of thinking is astonishingly destructive and retrograde, but it persists and has gained strength over the years. There needs to be a fundamental rethinking of this return to separatism and essentialism and a renewed embrace of the importance of working towards a society where, as I noted earlier, all of our neighborhoods belong to all of us. 

I notice both today and over the course of the litigation that some of the city’s justifications continue to be recited as though they had a factual basis. In fact, and I want to say this as clearly as I can, the policy has been a con job. The city stopped even claiming that it helped with imminent displacement of any kind or that it helped with non-imminent displacement from one’s apartment or from the city. And it had no evidence of helping those at risk of displacement from neighborhood. And the lottery data — and we analyzed millions and millions of application — showed clearly that the rent burden experienced by outsiders was equivalent to that experienced by insiders. 

In fact, one of the elements of the Order — paragraph 20 — deals with the possibility that someday the city might seek to modify the order (like the right to shelter is being litigated about now). The city specifically waived in paragraph 20 the right to rely on, in whole or in part, any of the justifications that it put forward in the lawsuit.

To end with something I’ve said many times, the massive amount of lottery data that we analyzed showed that about 85 percent of unique households applying to affordable-housing lotteries apply outside of their community districts at least 75 percent of the time. And that is true for applicants from every racial group. 

This case has always been about honoring the choices of New Yorkers — the choices that New Yorkers themselves seek to make — and the settlement in this matter brings us much closer to that in the lottery context. 


Read the Stipulation and Order.